Life insurance under threat from late contributions
Late payments of superannuation contributions by employers may be threatening the life insurance of tens of thousands of Australian workers, according to Intrust Super.
It is often the case that a member's insurance only begins when the initial employer contribution is received, according to Intrust Super chief executive Brendan O'Farrell.
He cited two recent cases where employers had potentially invalidated their employees' insurance claims because they had not fulfilled their superannuation guarantee obligations on time.
"These unfortunate cases are just the tip of the iceberg with this problem because examples only come to our attention when a worker is actually injured or passes away," O'Farrell said.
He added the insurer would be able to deny a claim if the insured event happened before the initial contribution was paid.
Lower-paid workers in service industries were the most vulnerable because they were more likely to frequently change jobs and superannuation funds, creating more chances for first payments to be missed, O'Farrell said.
"It is prudent for employees to contact their superannuation fund periodically to ensure that their super payments are being made in a timely fashion," he added.
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